SEC catches repeat securities fraud offender

On behalf of Arthur Aidala of Aidala Bertuna & Kamins posted in White Collar Crimes on Tuesday August 7, 2018.

A man previously convicted for securities fraud has agreed to settle charges leveled against him by the Securities and Exchange Commission. Investigators took action after detecting his manipulation of stock prices for three microcap companies after he had been released under supervision for his earlier conviction. The director of the New York regional office for the SEC said that the agency had protected the investing public with this investigation.

The complaint detailed his methods for concealing his actions with nominee brokerage accounts and people in foreign countries. The man allegedly had gained control of some companies by secretly owning stock. Through his control of multiple companies, he and his associates coordinated their stock trading to elevate prices on the three companies. Investigators cited his emails that directed agents to buy stocks in certain amounts at specific times.

According to court documents, he used overseas trading accounts to sell 200,000 shares of one of the companies. This occurred through a succession of matched trades that produced 80 percent of the company’s trading volume during its second day of trading. After he acknowledged the charges about stock manipulation and fraud, the SEC barred him from working as an officer or director of any public company. The court has yet to assign monetary sanctions and other penalties. He is facing a similar action brought by the U.S. Attorney’s Office for the Eastern District of Pennsylvania.

An individual accused of securities fraud might benefit from the representation of an attorney familiar with financial records and transactions. A legal evaluation could identify defense strategies, such as questioning the person’s connection to the evidence or expressing a willingness to restore misappropriated funds. With legal advice, a defendant could make an informed choice between a plea bargain or going to trial.